Correlation Between Chefs Warehouse and Davis Commodities
Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse and Davis Commodities at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chefs Warehouse and Davis Commodities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chefs Warehouse and Davis Commodities Limited, you can compare the effects of market volatilities on Chefs Warehouse and Davis Commodities and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chefs Warehouse with a short position of Davis Commodities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and Davis Commodities.
Diversification Opportunities for Chefs Warehouse and Davis Commodities
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chefs and Davis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and Davis Commodities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Commodities and Chefs Warehouse is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Chefs Warehouse are associated (or correlated) with Davis Commodities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Commodities has no effect on the direction of Chefs Warehouse i.e., Chefs Warehouse and Davis Commodities go up and down completely randomly.
Pair Corralation between Chefs Warehouse and Davis Commodities
Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 0.84 times more return on investment than Davis Commodities. However, The Chefs Warehouse is 1.19 times less risky than Davis Commodities. It trades about 0.27 of its potential returns per unit of risk. Davis Commodities Limited is currently generating about -0.28 per unit of risk. If you would invest 3,936 in The Chefs Warehouse on August 26, 2024 and sell it today you would earn a total of 538.00 from holding The Chefs Warehouse or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chefs Warehouse vs. Davis Commodities Limited
Performance |
| Timeline |
| Chefs Warehouse |
| Davis Commodities |
Chefs Warehouse and Davis Commodities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chefs Warehouse and Davis Commodities
The main advantage of trading using opposite Chefs Warehouse and Davis Commodities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse position performs unexpectedly, Davis Commodities can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Davis Commodities will offset losses from the drop in Davis Commodities' long position.| Chefs Warehouse vs. Hf Foods Group | Chefs Warehouse vs. Innovative Food Hldg | Chefs Warehouse vs. Calavo Growers | Chefs Warehouse vs. AMCON Distributing |
| Davis Commodities vs. Hf Foods Group | Davis Commodities vs. Innovative Food Hldg | Davis Commodities vs. Calavo Growers | Davis Commodities vs. The Chefs Warehouse |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |